Can Trump’s updated NAFTA keep US trade flowing?

Negotiations to update the North American Free Trade Agreement (NAFTA) started on 16 August as a result of changes demanded by the Trump administration.

The National Pork Producers Council (NPPC) has stressed the need for zero-tariffs on pork traded within North America to be maintained.

President Trump has made updating the 23-year-old trade deal between the United States, Canada and Mexico a priority since before taking office and even considered withdrawing from the agreement.

“Canada and Mexico are top markets for our pork, so, obviously, we don’t want any disruptions in our exports to those countries; we need to keep pork trade flowing,” said NPPC President Ken Maschhoff, a pork producer from Carlyle, Illinois. “We want to reiterate to the Trump administration that NAFTA has been a boon to the US pork industry and to all of American agriculture.”

The NPPC is one of the leading organisations supporting the agreement. Since its introduction on 1 January 1994 NAFTA has been a boon to the US economy and growth in total trade has outstripped that with the rest of the world with agricultural products one of the main beneficiaries.

In 2016 Mexico accounted for nearly one third of US exports of pig meat and shipments amounted to 767,000 tonnes including offals. Canada accounted for a further 10% and volumes amounted to 247,000 tonnes. In 1993 exports to these markets only amounted to 106,000 tonnes and 21,000 tonnes respectively. In 2016 the two markets accounted for almost 10% of total US pig meat production.

According to analysis by AHDB Pork, if there are any major changes to NAFTA this could open the door to the EU which is in the process of negotiating its own Free Trade Agreement (FTA) with Mexico. In 2016 the EU shipped just 2,800 tonnes to this market.

Earlier this year, AHDB Market Intelligence undertook a more in-depth analysis of the implications for US pork trade of any possible policy changes under the Trump administration, which can be found here.